Definition
Backup offer rate is the percentage of properties under contract with other offers waiting. High rates indicate strong demand and that contracts are likely to close. Low rates suggest weak demand or that deals are falling through.
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Backup offer rate indicates strong demand—when properties under contract have waiting backup offers, it shows multiple buyers interested. High backup offer rate (50%+ of properties under contract have backups) indicates: strong market, good pricing, high buyer interest. Low backup offer rate (<20% of properties have backups) indicates: weak demand, over-pricing, or limited buyer interest. For sellers, high backup offer rate is positive: if primary deal falls through, you have immediate fallback. For buyers, high backup offer rate pressure: know that other offers are waiting if you don't perform. Backup offer rate increases in strong markets and decreases in weak markets. Properties falling through often go to backup offer, so backup offer rate and fall-through rate often correlate: if fall-through rate is 15% but 30% have backups, all fall-throughs likely go to backups. Tracking backup offer rate helps understand market depth and demand.
Pro Tip
High backup offer rates protect sellers—if primary deal falls through, backup offer closes the deal. Low rates mean sellers are nervous about whether their deals will actually close.
Example
Market analysis: 100 properties under contract, 40 have backup offers waiting. Backup offer rate is 40%, indicating strong demand and multiple-offer situations.